Bank of America CFO: Capital market activities have improved, expecting investment banking business to grow by up to 15% in Q1.
Bank of America expects a year-on-year increase of 10% to 15% in investment banking revenue in the first quarter. Citigroup and JPMorgan also anticipate a lower growth rate in investment banking expenses. The Chief Financial Officer of Bank of America mentioned an improvement in capital market activities, with the expectation of a strong performance in the market department driven by stock trading in the first quarter. The S&P 500 index has already risen by 6.9%. Citigroup and JPMorgan forecast a decline in market revenue and trading income. Bank of America's net interest income is expected to reach the upper limit of the projected range, between $13.9 billion and $14 billion in the first quarter. Net interest income in the fourth quarter decreased by 5%.
Zhitong App learned that following optimistic expectations for the future expressed by several Wall Street major banks, Bank of America stated that it expects its investment banking revenue in the first quarter of this year to increase by 10% to 15% compared to the same period last year.
Alastair Borthwick, the Chief Financial Officer of Bank of America, mentioned during a financial conference on Wednesday, "Our capital market activities have shown improvement, which can be seen from the trading process."
Previously, Citigroup's CEO Jane Fraser informed investors that she expects a low double-digit percentage increase in investment banking fees in the first quarter compared to the fourth quarter of 2023.
Jeremy Barnum, the Chief Financial Officer of JPMorgan Chase, also pointed out earlier that the expense growth for this quarter compared to the same period last year will be in the low to mid double-digit range.
Borthwick stated that Bank of America's market division is expected to perform strongly in stock trading in the first quarter. This will result in revenue growth remaining flat compared to the strong growth in the same period last year. Data shows that the S&P 500 index has risen by 6.9% so far this quarter, led by tech stocks like Nvidia (NVDA.US).
Citigroup expects its market revenue in the first quarter to decline by 8% to 12% compared to the strong performance in the same period in 2023, while JPMorgan Chase anticipates a 5% to 10% decrease in trading revenue for this quarter compared to the same period last year.
Bank of America's net interest income, the difference between loan income and deposit income, is expected to reach the upper limit of the expected range of $13.9 billion to $14 billion in the first quarter.
It is reported that due to higher costs paid to customers for deposits, Bank of America's net interest income in the fourth quarter decreased by 5% to $13.9 billion. The profit of the second-largest bank in the U.S. shrank in the fourth quarter due to a one-time expenditure of $3.7 billion and a decline in interest income.
